Insurance companies can no longer deny a claim on the grounds of delayed filing, with the Supreme Court throwing new light on this practice. The ruling, passed by a two-judge bench comprising Justice S Abdul Nazeer and Justice R K Agrawal is aimed at improving customer satisfaction in the industry.
As per the ruling, insurers will have to consider the reason, if any, for the delay in filing a case. If this delay is genuine, they will have to acknowledge it. The new ruling supersedes previous rulings by consumer courts which permitted rejection of claims on grounds of delayed filing.
The bench passed this verdict while hearing a case involving a policyholder of Reliance General Insurance Company. While the insurer had rejected the claims of the policyholder, the Supreme Court overturned the ruling of the National Consumer Disputes Redressal Commission, ordering the company to pay the aggrieved a sum of Rs.8.35 lakh.
Ideally, insurance companies expect policyholders to inform them about accidents/theft of vehicles immediately. The SC noted that this might not be possible in all instances, with owners often taking time to track stolen vehicles before approaching an insurer.
Insurance companies, however, have the right to reject a claim if they have valid reasons for the same.
The ruling is likely to go a long way in dispelling any doubts about unethical practices prevalent in the insurance industry, offering relief to individuals who have genuine cases.